Westminster update: Economic Crime Bill, minister clarifies new regulatory objective

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What you need to know

1. Economic Crime Bill: minister clarifies new regulatory objective

The second day of the Economic Crime Bill’s report stage on Tuesday 27 June saw an important development for our members.

The minister gave a statement clarifying the scope of the proposed new regulatory objective on tackling economic crime.

We have long been calling for clarification of the new regulatory objective on economic crime, flagging the risk that without clarification the objective could create disproportionate new burdens on solicitors without a tangible impact on economic crime prevention.

This has been an ongoing concern as this Bill has moved through Parliament, and we have been engaging with ministers and peers – our most recent meeting with the minister was referenced during the debate by Lord Etherton (Crossbench), with whom we have been working closely.

On Tuesday, the minister responded to these concerns with a statement in the House echoing our lines to provide clarity. He noted that: “The objective is intended to be focused on the areas where the evidence of risk or greatest concern is in relation to the relevant professions. Legal services regulators will normally be expected to adopt a risk-based approach having regard to the available evidence to identify areas of economic crime that they should be focusing on when complying with and promoting the new objective”.

These remarks provide a clear steer to the LSB and SRA and set out the need for the regulators to work with the profession when implementing the new regulatory objective. This will help ensure the objective is ultimately implemented in a far and proportionate way for members.

Elsewhere in the debate, the government put forward two amendments to tackle strategic lawsuits against public participation (SLAPPs) – though only SLAPPs that are related to economic crime. These amendments clarify the definition of a SLAPP claim and introduce a power to make Civil Procedure Rules to strike out a SLAPP claim before it goes to trial.

We have welcomed these amendments while sharing our queries with Peers around implementation, compatibility with the European Convention on Human Rights and the remit of the Civil Procedure Rules Committee.

2. Court reform: HMCTS accused of underestimating complexity

The Public Accounts Select Committee has criticised His Majesty’s Courts and Tribunals Service (HMCTS) for underestimating the complexity and scale of its court reform programme.

The Committee published a report on Friday 30 June warning that HMCTS risked undermining public confidence in the fairness of the justice system and raising concerns that HMCTS did not fully understand how its court reforms are impacting court users.

The report echoed many of the points we made in our written submission to the Committee and noted our concerns that members are having issues with the online portal for the family public law service. It also quoted our view that HMCTS tends to focus on the positives of the common platform rollout, despite this not matching with on-the-ground user feedback.

The report has put forward a number of recommendations, including outlining that the court reform programme’s future plans are realistic and will not include further resets. The Committee also calls on HMCTS to set out how it will improve its approach to engagement with staff and stakeholders and outline how it will ensure lessons learned from the early stages of the programme will be fed into future projects.

3. Justice Questions: government bins Bill of Rights Bill

The lord chancellor, Alex Chalk, confirmed at Justice Questions on Tuesday 27 June that the proposed Bill of Rights Bill has been dropped and the government will no longer move forward with the legislation.

In response to a question from Sir Bob Neill, chair of the Justice Select Committee, Chalk outlined how instead of moving ahead with the Bill, the government is instead taking action to address issues with the Human Rights Act through the Illegal Migration Bill, Victims and Prisoners Bill and other pieces of recent legislation.

We welcomed the scrapping of the Bill as it would have created an acceptable class of human rights abuses, weakened individual rights, and seen the UK diverge from our international human rights obligations.

MPs also questioned the lord chancellor on the Illegal Migration Bill, with Marion Fellows (SNP) asking if plans to prevent the courts from granting an interim remedy to delay the removal of an individual while their judicial review claim is heard was a fundamental attack on the right to access the courts.

Chalk argued the UK is a fair country, but needs to send a clear message to migrants in France that they should not attempt to reach the UK.

4. Illegal Migration Bill: government suffers defeats in Lords

The Illegal Migration Bill had its first day of report stage on Wednesday 28 June, which saw fundamental changes voted through by the House of Lords.

Successful amendments included removing retrospectivity from several of the Bill’s provisions, which would have seen people who had entered the country as early as March affected by the Bill. Lord Carlile (Crossbench) said that retrospectivity is ‘the enemy of legal certainty’, and that the need for such retrospectivity had not been evidenced.

The Lords also voted in favour of Amendment 5 – which sought to ensure section 3 of the Human Rights Act continues to apply to provisions of the Bill.

This amendment received strong support from even Conservative peers, with Lord Cormack calling the amendment ‘fundamental’, and Baroness Helic commenting that the amendment is ‘firmly in the Conservative tradition of strengthening, not undermining, the international rule of law.’

While the minister said that the amendment ‘takes a wrecking ball to our long-established constitutional arrangements’, crossbencher Lord Etherton said that the amendment would not impose a positive obligation to do anything specifically required under these treaties, but simply states that the Bill must be interpreted so as not to conflict with the treaties.

Peers also voted for amendments to protect victims of modern slavery and human trafficking and unaccompanied children, and to allow people who have made a judicial review claim in relation to their removal from the UK to remain in the country while this claim is processed.

5. Russian sanctions: new restrictions on legal services come into force

On Thursday 29 June the Ministry of Justice published a new statutory instrument updating the Russian sanctions regulations.

The instrument adds legal advisory services to the list of sanctioned activities and aims to prevent UK lawyers from advising Russian companies in certain business deals.

The legislation makes amendments to Part 5 of the Russia (Sanctions) (EU Exit) Regulations 2019.

The changes define legal advisory services, highlights where and how these activities are now restricted, and outlines exceptions to the new sanction.

The measure came into force on 30 June and we will continue to engage with members to understand the impact of these changes.

Coming up:

We will be working closely with MPs and peers to influence a number of bills and inquiries:

Illegal Migration Bill will have its report stage in the Lords on 3 July

Retained EU Law Bill received Royal Assent on 29 June

Victims and Prisoners Bill will continue its committee stage this week

Economic Crime and Corporate Transparency Bill will have its third reading in the Lords on 4 July

National Security Bill will have its consideration of Lords amendments on 4 July

Powers of Attorney Bill will have its committee stage in the Lords on 4 July

Data Protection and Digital Information (No. 2) Bill will have its report stage in the Commons, date to be confirmed

Levelling Up and Regeneration Bill will have its report stage in the Lords on 11 July